The world is still dealing with the current energy mess created from the closure of the Strait of Hormuz.
One consequence of this is Asian countries are using more thermal coal to offset higher LNG prices.
This is evident in recent Chinese consumption data:
Breakwave Advisors reported back on 6 August:
“Thermal coal burn at China’s six major power plants has set another 2026 record this week and remains well above last year’s burn level.
“July started out slow, but this summer continues to experience a drastic change. Overall, we remain very bullish for China’s near-term coal import prospects.”
That’s a benefit to Australian coal producers. One of those is New Hope (ASX:NHC). It reported its quarterly results this week.
NHC’s average realised sales price for the quarter was $155.8 per tonne, which was 10.7% higher than in the previous quarter.
Quarterly production was 11% higher, with its Bengalla Mine operating in excess of its target. Coal sales were also higher than guidance. Costs came in the lower range of previous guidance, too. EBITDA (earnings before interest, taxes, depreciation, and amortisation) increased by 30% to $169 million.
Robert Gregory of Glenmore Asset Management is an investor in the stock and says the result was ahead of market expectations.
He describes the result as a good one.
“NHC finished the year with $485 million in cash, which was well ahead of market expectations,” he said.
“This should bode well for the company to increase dividends over the next 12–18 months.
“Overall, another solid result for a high-quality resource company. NHC’s two thermal coal mines continue to deliver consistent results for shareholders.”
Write to Callum Newman at Mining.com.au
Images: Unsplash & Breakwave Advisors
